Hedge Fund Bailout
A hedge fund is a private investment fund open to a limited range of investors which is permitted by regulators to undertake a wider range of activities than other investment funds and which pays a performance fee to its investment manager. Although each fund will have its own strategy which determines the type of investments and the methods of investment it undertakes, hedge funds as a class invest in a broad range of investments, from shares, debt and commodities to works of art.
As the name implies, hedge funds often seek to offset potential losses in the principal markets they invest in by hedging their investments using a variety of methods, most notably short selling. However, the term "hedge fund" has come to be applied to many funds that do not actually hedge their investments, and in particular to funds using short selling and other "hedging" methods to increase rather than reduce risk, with the expectation of increasing return.
“We'll see a tidal wave of hedge fund closures before the end of 2008,” said David C. Saunders, founding managing director of K2 Advisors LLC, Stamford, Conn. K2 manages $7.4 billion in hedge funds of funds. Mr. Saunders said smaller firms will be hard-pressed to survive a triple whammy: poor performance that has dropped 90% of funds below their high-water marks, resulting in no performance fee income; large redemption requests that will force portfolio liquidations at fire-sale prices, further dropping performance; and rising costs for everything from utilities to accounting, administrative, information and compliance services.
The pending hedge fund collapse provides another example of how unregulated businesses lacking most any kind of oversight or transparency will eventually create a disaster not only for themselves for the overall economy. From the NY Post:
Some of the industry's smartest investors got hammered over the summer amid nearly unprecedented volatility. Oil went from close to $150 a barrel to below $100 a barrel in a matter of weeks, while stocks were roiled by a series of bank failures. And a formerly winning strategy - shorting stocks - kept getting hampered by new rules from the Securities and Exchange Commission. Then came September, which is shaping up to be the worst month on record, comparable only to a decline of 8.7 percent in August 1998, when Long-Term Capital Management imploded, according to Hedge Fund Research Inc.
What Paulson needs to do now?
POSSIBLE FED RATE CUT?
The Fed's willingness to consider additional cuts marks a turnaround from the past few months, when soaring food and energy prices turned its attention to inflation risks.
Hurricane Ike's Devastation
Who voted against the $700 billion financial bailout plan
The No Votes
Details on the Republican and Democratic representatives who voted against the $700 billion financial bailout plan.
See below from a very good report from nytimes.
http://www.nytimes.com/interactive/2008/09/29/business/20080929-CONGRESS-VOTE-GRAPHIC.html
Rumour about ICICI Bankruptcy
While I accept this as a rumour, the proverb says portion of a rumour may be true. That is to say, the financial health of ICICI Bank is not as strong as it was before, especially after the falling of Lehman etc.
Although ICICI is next to SBI in India, they indeed took some levereged position in the financial institutions that fell off in the financial turmoil in US. Though ICICI is not down and out, they were indeed hurt. That is why the stock has been beaten down so heavily. The last quarter result of ICICI was pretty poor in comparison to SBI and HDFC.
Lets hope that, because of the strict regulations, the Indian Banking industry isn't hurt as much as the US banks.
Indian nun gang raped, police did nothing
India's Orissa state government has been accused of failing to take action against the perpetrators of the gang rape of a 28 year old Catholic nun.
The Hindu reports the Orissa government has failed to take any action against those who committed the gang rape of the nun and the brutal attack on a Catholic priest who courageously resisted their attempts to force him to participate in the atrocity.
The incidents took place on August 25 at K. Nuagaon, 12 kilometres from the Baliguda subdivision in Kandhamal district in Orissa state. Both victims filed First Information Reports at the Baliguda police station. Sister Nirmala, Superior-General of the Missionaries of Charity, wrote to the Orissa Chief Minister and the Prime Minister specifying the atrocities.
The brutalisation of the nun and the priest by a mob raising anti-Christian, Hindutva slogans took place around 1pm at the site of the Divya Jyothi Pastor Centre.
http://www.hindu.com/2008/09/30/stories/2008093050460100.htm
http://www.cathnews.com/article.aspx?aeid=9231